Can You Help Me??? 5 Star Work ONLY!!!

Review Decision Case 1 (World.com) on page 186 in chapter 3. By Saturday, April 18, 2015, analyze the data presented in the case scenario and address the following questions in your initial post:

1. Assume that the most you would pay for the business is 20 times the monthly net income you could expect to earn from it. Compute this possible price.
2. Nicholas states that the least he will take for the business is an amount equal to the business's stockholders' equity balance on January 31. Compute this amount.
3. Under these conditions, how much should you offer Nicholas? Give your reason.

Case 1. Lee Nicholas has been the owner and has operated world.com advertisting since its beginning 10 years ago. The company has prospered. Recently, Nicholas mentioned that he would sell the business for the right price.

Assume that you are interested in buying world.com advertisting. you obtain the most recent monthly trial balance, which follows. Revenues and expenses vary little from month to month, and January is a typical month. Your investigation reveals that the trial balance does not include monthly revenues of $3,800 and expenses of $1,100. Also, if you were to buy world.com advertisting, you would hire a manger so you could devote your time to other duties. Assume that this person would require a monthly salary of $5,000.

WORLD.COM ADVERTISTING

Trial Balance

January 31,2012

cash: 9,700 debit

accounts receivable: 14,100 debit

prepaid expenses: 2,600 debit

building: 221,300 debit

accumulated depreciation: 68,600 credit

accounts payable: 13,000 credit

salary payable: 0

unearned service revenue: 56,700 credit

Lee Nicholas Capital: 1110,400 credit

Lee Nicholas Withdrawals: 9,000 debit

service revenue: 12,300 credit

rent expense: 0

salary expense: 3,400

utilities expense: 900

supplies expense: 0

total: 261,000 debit & 261,000 credit